- U.S. Senate Majority Leader Harry Reid (D-NV) and Senators Orrin Hatch (R-UT) and Robert Menendez (D-NJ) were joined today by energy-independence advocate T. Boone Pickens to tout new legislation that would boost vehicles that run on clean natural gas. The NAT GAS Act, introduced today by Menendez and co-sponsored by Reid and Hatch, would extend and increase tax credits for natural gas vehicles and refueling.
Background on legislation
Makes all dedicated natural gas-fueled vehicles eligible for a credit equal to 80% of the vehicle’s incremental cost. Only some dedicated natural gas vehicles currently can qualify for an 80% federal tax credit Makes all bi-fuel natural gas-fueled vehicles eligible for a credit equal to 50% of the vehicle’s incremental cost. This is the first time bi-fuel vehicles would be eligible for a federal tax credit Increase the allowable incremental cost limits to more accurately reflect the cost of producing or converting natural gas vehicles: For light-duty vehicle, the purchase tax credit cap would be increased by to $12,500 (currently $5,000) For all other vehicle weight classes, the purchase tax credit cap would be doubled Increases the refueling property tax credit from $50,000 to $100,000 per station
The largest hurdle to natural gas vehicles is the infrastructure. If people are going to drive natural gas vehicles, they need to be able to re-fuel them. But fleet vehicles and trucks, which represent a large amount of vehicles on the road, can be the first to change. They drive similar routes in a predictable fashion, which is much easier to know where and when to re-fuel.
There are a couple of companies working on this as well. Pickens' own Clean Energy Fuels Corp. (CLNE) is one, and Fuel Systems Solutions Inc. (FSYS) is another. Clean energy has been steadily getting contracts for fleet vehicles from various municipalities and companies. Fuel Systems is heavily into components for alternative fuel vehicles, and was on fire last summer when gas prices spiked.
These stocks are still largely tied to fuel prices, but the NAT GAS act will likely get the ball rolling for these companies to be less dependent on gas.
Here are the charts: